#capital-gains-tax

#capital-gains-tax

The top 1% of taxpayers are responsible for around a third of the total paid in Income Tax and Capital Gains Tax (CGT), new data from Wealth Club, the UK's largest non-advisory investment service for tax-efficient and private market investments, shows. Its Freedom of Information request to HMRC found 500,000 individuals paid £93.828 billion in income tax and CGT in the 2023/24 tax year equivalent to 33% of the total £288.5 billion raised.

The UK's capital gains tax (CGT) system underwent significant changes in October 2024, following the Chancellor Rachel Reeves' Autumn Budget. The adjustments affect everyone from casual investors to landlords, entrepreneurs, and those disposing of crypto assets - and, crucially, HMRC's outdated self-assessment software has not kept up with the mid-year changes. For anyone filing a 2024-25 return, here is a comprehensive guide to the new rules, the key numbers, and what it means for your finances.

Divorce brings complexities in property division, with capital gains tax implications occurring when a marital home sells for more than its purchase price. Understanding capital gains exclusions and their timing assists couples in avoiding costly surprises.

The No Tax on Home Sales Act aims to eliminate federal capital gains tax for homeowners, specifically benefiting those selling their primary residences.

According to the National Association of REALTORS®, 35% of homeowners in Virginia now exceed the federal capital gains tax exemption, potentially triggering thousands in federal and state taxes when they sell.

Nearly one-third of Texas homeowners might face unexpected tax bills when selling, as 32.9% exceed the $250,000 federal capital gains exemption.

More than a quarter of South Carolina homeowners could face a surprise tax bill if they decide to sell because they have built up excess home equity.

Nearly half of Rhode Island homeowners could face a surprise tax bill upon selling their homes due to accumulated equity exceeding federal capital gains tax exclusions.

More than half of Oregon homeowners may face unexpected tax liabilities due to increased home equity exceeding federal capital gains tax exclusions, potentially losing significant profits on sales.

In New York, 46.1% of homeowners possess home equity that exceeds IRS capital gains tax exclusions, leading to potentially significant tax liabilities upon sale.

Over half of Montana homeowners possess home equity exceeding IRS capital gains tax exclusions. With home prices up, middle-class sellers face unexpected tax burdens.

The capital gains exclusion was designed in 1997 to help homeowners avoid taxes when selling their primary residence. At the time, the $250,000 (individual) and $500,000 (joint) limits covered most home sales. But those limits have never been adjusted for inflation.

More than 60% of homeowners in Massachusetts could face a hidden home equity tax due to outdated federal capital gains rules that remain unchanged for decades.

According to the National Association of REALTORS®, 54.9% of homeowners in Idaho have built up equity exceeding the $250,000 exemption for individual filers.

A federal capital gains exclusion rule from the 1990s is quietly hitting sellers in the Sunshine State with what economists call a hidden home equity tax.